In the words of ASIC Chair Joe Longo, “It is critically important that AFS [Australian Financial Services] licensees classify retail and wholesale clients in accordance with the law. ASIC supports a regulatory framework for crypto with a focus on consumer protection and market integrity.”
The Australian Securities and Investments Commission (ASIC) canceled Binance Australia’s financial services license following a targeted review of the exchange’s operations.
Earlier in February, Binance Australia closed the derivatives accounts of clients who were classified as wholesale investors. Subsequently, the ASIC disclosed its plans to investigate Binance’s Australian arm.
With effect from 14 April 2023, clients will not be able to increase derivatives positions or open new positions with Binance.
— whalechart (@WhaleChart) April 6, 2023
In its latest press release, the regulatory body claimed that its review involved auditing Binance Australia’s classification of retail and wholesale clients. The ASIC Chairman added,
“Our targeted review of these matters is ongoing, including focus on the extent of consumer harms.”
Following the cancellation of its derivatives license, Binance’s Australian clients will not be able to open new derivative positions after April 14. Moreover, the ASIC has ordered Binance Australia to close open derivative positions on April 21.
In response to ASIC’s demands, Binance has agreed to close its Australian derivatives exchange.
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According to Binance, the change will affect less than 100 clients who use the platform for trading derivatives. Binance also stressed that discontinuing derivatives trading will not impact spot trading facilities for its Australian users.
Meanwhile, Binance’s global platform was targeted by two lawsuits over the past weeks. On March 27, the exchange and its CEO, Changpeng Zhao, were sued by the CFTC over allegations of violations of federal laws. Soon, US law firms Boies Schiller Flexner and Moskowitz Law Firm filed a $1B lawsuit against Binance for unlawful promotion of unregistered securities.
Written by
Ayush Pande
Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.
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